In this article, we will look at the 10 best stocks to buy in 2022 according to billionaire Mario Gabelli.
Mario Joseph Gabelli was born on June 19, 1942, in New York. He is an investor, financial advisor, philanthropist, and CEO and founder of GAMCO Investors. In 2000, Gabelli was inducted into “Barron’s All-Century Team” as one of the most influential mutual fund industry portfolio managers.
Early Life and Career
Mario Gabelli was born to Italian-American immigrant parents and started his education at Fordham Preparatory School. When he was just five, Gabelli set up a shoe-shine box at the Bronx Subway Station. Gabelli had an interest in the stock market from a very young age, and his first investment in the stock market was at the age of 13. He studied at Fordham University on a scholarship and graduated summa cum laude in 1965. Later on, he received his MBA from Columbia Business School.
Mario Gabelli started working as a security analyst at Loeb, Rhoades & Co., where he worked for a few years. In 1976, he went on to launch Gabelli Asset Management Company. According to Forbes, as of 2022, Mario Gabelli is worth $1.8 billion.
Mario Gabelli explained his investment philosophy in a few simple words:
“That’s my approach to life: Go where others fear to tread. Hell, I bought a Cadillac in the middle of the oil embargo.”
Mario Gabelli rates a company by cash flow instead of earnings. He prefers to judge the company by the price per share it is likely to be bought than the share price on the stock market.
GAMCO Investors
Mario Gabelli’s GAMCO Investors was founded in 1976 as Gabelli Asset Management Company in Rye, New York. The firm’s name was changed to GAMCO Investors in 2005. It provides brokerage services and investment advice to mutual funds, financial institutions, and investors.
According to the first-quarter 13F filings, GAMCO Investors has $11.8 billion in managed 13F securities. The firm added 49 new stocks to its portfolio and opted out of 54. Additionally, it increased its purchases in 279 stocks and reduced holdings in 359 stocks.
American Express Company (NYSE:AXP), Madison Square Garden Sports Corp. (NYSE:MSGS), and Alphabet Inc. (NASDAQ:GOOG) are some of the most prominent names in GAMCO Investors’ portfolio.
Mario Gabelli of GAMCO Investors
Our Methodology
These stocks have been picked from Mario Gabelli’s GAMCO Investors Q1 2022 13F portfolio. These are the top 10 holdings of Gabelli’s fund as of the end of the first quarter of 2021.
Best Stocks to Buy in 2022 According to Billionaire Mario Gabelli
10. Ryman Hospitality Properties, Inc. (NYSE:RHP)
Number of Hedge Fund Holders: 26
GAMCO Investors’ Stake Value: $113.8 million
Percentage of GAMCO Investors’ Portfolio: 1.02%
Ryman Hospitality Properties, Inc. (NYSE:RHP) is an almost century-old hospitality and media company that started operating as a REIT in October 2012. According to first-quarter 2022 13F filings, GAMCO Investors owned 1.2 million company shares worth $113.8 million. Ryman Hospitality Properties, Inc. (NYSE:RHP) makes up 1.02% of the fund’s portfolio.
Like most hospitality companies, Ryman Hospitality Properties, Inc. (NYSE:RHP) also declined steeply during the COVID-19 pandemic. However, the company has recently made a well-grounded comeback. In April, the occupancy at Gaylord hotels, a subsidiary of Ryman Hospitality Properties, Inc. (NYSE:RHP), reached 71%, even with a 17% increase in room rate.
Out of the 912 hedge funds tracked by Insider Monkey, 26 hedge funds were bullish on Ryman Hospitality Properties, Inc. (NYSE:RHP) in the first quarter of 2022. GAMCO Investors remained the most prominent name among the hedge funds having a stake in the company. In the previous quarter, 16 hedge funds had stakes in the company.
Ryman Hospitality Properties, Inc. (NYSE:RHP) along with American Express Company (NYSE:AXP), Madison Square Garden Sports Corp. (NYSE:MSGS), and Alphabet Inc. (NASDAQ:GOOG) are some of the best stocks to buy according to Mario Gabelli.
Here is what Diamond Hill Capital said about Ryman Hospitality Properties, Inc. (NYSE:RHP) in its fourth-quarter 2021 investor letter:
“Ryman Hospitality is a well-run, resiliently positioned REIT that has carved out a core competency in the group-travel business. The company owns 5 of the 10 largest convention-oriented resorts under the Gaylord Hotel brand, and it has a small entertainment business which owns iconic assets like the Grand Ole Opry and Ryman Auditorium. We believe the group-travel business will normalize and potentially be of heightened importance given the increase in remote work. Pandemic-related industry-wide disruptions coupled with the inflationary dynamic in construction should result in minimal new industry capacity over the next five years, favoring Ryman’s portfolio of assets.”
9. Madison Square Garden Sports Corp. (NYSE:MSGS)
Number of Hedge Fund Holders: 40
GAMCO Investors’ Stake Value: $115.06 million
Percentage of GAMCO Investors’ Portfolio: 1.03%
The holding company Madison Square Garden Sports Corp. (NYSE:MSGS) made up 1.03% of GAMCO Investors’ portfolio in the first quarter of 2022. The firm owned 641,507 shares of the company worth $115.06 million.
On June 2, Wolfe Research analyst Peter Supino maintained an Outperform rating on Madison Square Garden Sports Corp. (NYSE:MSGS)’s shares after lowering the price target to $231 from $238. According to the analyst, the company’s innovation and competition are accelerating.
Longleaf Partners Fund mentioned Madison Square Garden Sports Corp. (NYSE:MSGS) in its third-quarter 2021 investor letter. Here is what the firm said:
“While our largest holdings received at least a little market appreciation, our detractors were unreasonably punished based on headline-level misunderstandings. At MSG Sports (MSGS), the Knicks and James Dolan stir strong emotions among finance people in New York, but the fact remains that the Dolan family has made multiple shareholder-friendly moves over the years (which we benefited from as holders of the original incarnation of MSG 10 years ago in the Small-Cap Fund), and we believe that more could be coming for MSGS in the near future. In the meantime, the teams’ ups and downs and the lack of any additional news will let the market paint a short-term focused picture. Our ultimate comfort and patience rest in owning the Knicks and the Rangers at a combined enterprise value of $4.8 billion for both. The NBA and NHL comparables, Forbes valuations, and Sportico valuations are all much higher than that for these two teams.”
8. Textron Inc. (NYSE:TXT)
Number of Hedge Fund Holders: 26
GAMCO Investors’ Stake Value: $138.81 million
Percentage of GAMCO Investors’ Portfolio: 1.25%
Textron Inc. (NYSE:TXT) is a Rhode Island-based industrial conglomerate. The company’s subsidiaries are divided into aerospace, defense, and automotive. In April 2022, the multi-industry company acquired Pipistrel, a Slovenian aircraft company, for $235 million. The acquisition was made solely to create a new division for electric aircraft development by Textron Inc. (NYSE:TXT),
According to the first-quarter 2022 earnings reports, Textron Inc. (NYSE:TXT) posted an EPS of $0.88, surpassing the estimates by $0.14. The YoY EPS growth has been 25%. The company also outperformed its revenue estimates of $2.97 billion in the same quarter after generating $3 billion. On the day Textron Inc. (NYSE:TXT) announced its earnings, the stock rose 7.5%.
According to Insider Monkey’s first-quarter 2021 database, 26 hedge funds had stakes in Textron Inc. (NYSE:TXT) in the first quarter of 2022. Adage Capital Management held the most significant stake with 4.6 million shares worth $343.967 million. The firm increased its activity in the company by 6% compared to the previous quarter.
7. CNH Industrial N.V. (NYSE:CNHI)
Number of Hedge Fund Holders: 33
GAMCO Investors’ Stake Value: $157.38 million
Percentage of GAMCO Investors’ Portfolio: 1.42%
CNH Industrial N.V. (NYSE:CNHI) produces and sells agricultural, heavy equipment, and construction machinery. A significant part of the company is owned and controlled by Exor, a Dutch holding company, with 26.9% of common stock and 42.5% of voting rights. In the first quarter of 2022, GAMCO Investors held 9.9 million company shares worth $157.38 million.
As of March 2021, CNH Industrial N.V. (NYSE:CNHI) had cash and cash equivalents of $3.2 billion and $9.4 billion of available liquidity. Moreover, the FCF from industrial activities was $1.059 billion.
On April 14, Deutsche Bank analyst Nicole DeBlase held on to a Buy rating on CNH Industrial N.V. (NYSE:CNHI)’s shares and lowered the price target from $21 to $20. According to the analyst, the estimates look achievable and forecast 11 beats and 9 misses in the current earning season.
Here is what Longleaf Partners Fund had to say about CNH Industrial N.V. (NYSE:CNHI) in its fourth-quarter 2021 investor letter:
“CNH Industrial (55%, 2.51%; 16%, 0.65%), a leading farm equipment and commercial vehicle manufacturer globally, was another top performer for the year. CNH reported strong results throughout the year, beating our initial conservative expectations. The US agricultural cycle has been firmly in the company’s favor, driven by commodity price strength, healthy farm balance sheets, advanced technology adoption, and aging fleets feeding replacement demand. We believe we are past the mid-cycle but expect the strong upcycle to continue with the solid orderbooks and strong visibility. On December 31, 2021, CNHI completed the demerger of its on-highway business, which includes its IVECO commercial vehicles and FPT powertrain businesses. This transaction creates a pure play off-highway company comprised of the higher-multiple agricultural, construction, and specialty vehicle businesses. We expect a narrowing of the discount to the net asset value once we have two focused companies valued at peer multiples.”
6. Crane Holdings Co. (NYSE:CR)
Number of Hedge Fund Holders: 26
GAMCO Investors’ Stake Value: $161.3 million
Percentage of GAMCO Investors’ Portfolio: 1.45%
Crane Holdings Co. (NYSE:CR) is a holding company headquartered in Stamford, Connecticut. Its products include aerospace & electronics, payment and merchandising technologies, fluid handling, and sensing and control systems. Crane Holdings Co. (NYSE:CR) has grown its earnings by 27% per year for the past five years.
Crane Holdings Co. (NYSE:CR) is a dividend stock that has increased its payout by nearly 6.1% each year for the last 10 years. The company has been paying around 27% of its earnings to its investors and 31% of its free cash flow as dividends.
According to Crane Holdings Co. (NYSE:CR) first-quarter 2021 reports, the company disclosed an EPS of $1.81, compared to the analyst estimates of $1.68. In addition, the company also surpassed its revenue estimates by $338,940 after generating $801.10 million.
Other than American Express Company (NYSE:AXP), Madison Square Garden Sports Corp. (NYSE:MSGS) and Alphabet Inc. (NASDAQ:GOOG), Crane Holdings Co. (NYSE:CR) is one of the top stock picks in the portfolio of GAMCO Investors.
5. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 69
GAMCO Investors’ Stake Value: $162.78 million
Percentage of GAMCO Investors’ Portfolio: 1.46%
Forbes has named American Express Company (NYSE:AXP) the 28th most valuable brand in the world. Among financial services brands, the company tops the list. According to GAMCO Investors’ first quarter 2022 13F filings, the firm owned 870,490 shares of the company worth $162.78 million. American Express Company (NYSE:AXP) makes up 1.46% of GAMCO Investors’ portfolio.
On June 6, Edward Jones analyst Kyle Sanders upgraded American Express Company (NYSE:AXP)’s shares from Hold to Buy. The analyst mentions that the company’s most recent projects to attract young customers have led the company to significant account growth.
4. Mueller Industries, Inc. (NYSE:MLI)
Number of Hedge Fund Holders: 17
GAMCO Investors’ Stake Value: $167.025 million
Percentage of GAMCO Investors’ Portfolio: 1.5%
Mueller Industries, Inc. (NYSE:MLI) produces and sells copper, brass, aluminum, and plastic products globally. It is one of the most significant companies in GAMCO Investors’ portfolio. In the first quarter of 2022, it made up 1.5% of the firm’s portfolio with 3.08 million shares worth $167.025 million.
Out of the 912 hedge funds tracked by Insider Monkey, 17 had stakes worth $287.24 million in Mueller Industries, Inc. (NYSE:MLI) in the first quarter of 2022. In the previous quarter, 18 hedge funds were bullish on the company, with stakes worth $306.3 billion.
3. Sony Group Corporation (NYSE:SONY)
Number of Hedge Fund Holders: 17
GAMCO Investors’ Stake Value: $167.025 million
Percentage of GAMCO Investors’ Portfolio: 1.5%
Sony Group Corporation (NYSE:SONY) is the largest video game publisher and video game console company. The company has sold 20 million units of the Play Station 5 since its launch in 2020. Sony Group Corporation (NYSE:SONY) is the most cash-rich Japanese company, with approximately $14.87 billion in cash reserves.
On May 18, Oppenheimer analyst Martin Yang issued an Outperform rating on Sony Group Corporation (NYSE:SONY)’s shares. However, the analyst lowered the company’s price target from $150 to $125.
Here is what Aristotle Capital Management had to say about Sony Group Corporation (NYSE:SONY) in their first quarter 2022 investor letter:
“Sony, maker of the PlayStation videogame console, was a leading detractor for the quarter. After a strong year in 2021, a shortfall in PlayStation 5 sales due to continued semiconductor shortages has dampened new console unit sales. Although there are likely to be continued limitations on the supply of components in the short term, consumer demand remains strong, and upcoming releases of major titles such as Horizon Forbidden West and Gran Turismo 7 are likely to further enhance demand. While Sony continues to manage supply-chain headwinds, the company has also again demonstrated its ability to build on the fundamental strength of its business across various segments. During the quarter, Sony acquired Bungie, a U.S.-based videogame developer known for the Destiny franchise and live game services; completed its initial equity investment in Japan Advanced Semiconductor Manufacturing, a foundry service subsidiary of Taiwan Semiconductor Manufacturing Company (TSMC); and acquired Brazilian music label Som Livre. Lastly, Sony announced a partnership with Honda Motor (NYSE:HMC), where the two companies expect to combine Honda’s expertise in manufacturing vehicles with Sony’s proficiency in imaging, sensing, telecommunication, and network technologies to develop and commercialize electric vehicles. We feel these strategic actions demonstrate Sony’s ability to continue to improve on its market positions across its business segments with a long-term, forward-looking approach.”
2. GATX Corporation (NYSE:GATX)
Number of Hedge Fund Holders: 14
GAMCO Investors’ Stake Value: $203 million
Percentage of GAMCO Investors’ Portfolio: 1.83%
GATX Corporation (NYSE:GATX) is a railcar lessor with fleets across North America, Europe, and Asia. GAMCO Investors’ stake in the company was $203 million by the first quarter of 2022. The fund owned around 1.6 million shares of the company.
GATX Corporation (NYSE:GATX)’s EPS for the first quarter of 2022 surpassed the estimates by a whopping 68.10% at $2.34. However, the company’s revenue was $6.15 million below the analyst consensus after generating $316.60 million.
Insider Monkey database reveals that GATX Corporation (NYSE:GATX) was a part of 14 hedge funds’ portfolios in the first quarter of 2022.
1. Herc Holdings Inc. (NYSE:HRI)
Number of Hedge Fund Holders: 25
GAMCO Investors’ Stake Value: $322.42 million
Percentage of GAMCO Investors’ Portfolio: 2.91%
Herc Holdings Inc. (NYSE:HRI) is a global equipment rental and leasing company. GAMCO Investors has given the company the highest weightage in its portfolio, with 1.9 million shares worth $322.42 million.
On April 22, Baird analyst Mircea Dobre slashed the price target of Herc Holdings Inc. (NYSE:HRI) from $158 to $161 and maintained a Neutral rating on its shares.
You can also take a peek at 10 Stocks to Buy Now According to Steve Ketchum’s Sound Point Capital and 10 Stocks to Buy in April According to Jim Cramer.
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Disclosure: None. 10 Best Stocks to Buy in 2022 According to Billionaire Mario Gabelli is originally published on Insider Monkey.
